Montenegro’s state-owned utility EPCG and UAE renewable-energy group Masdar are targeting 2027 for the possible start of construction on their first solar project under a new strategic partnership. The timetable is dependent on completion of engineering, permitting, corporate structuring and financing work, so the project has not yet reached a final construction-ready stage.
EPCG and Masdar plan to hold 50% each in a new joint company that will develop projects included in their cooperation framework. The partnership was formalised through a joint investment agreement in April 2026 and expanded in July via development agreements covering the Krupac and Stedim solar projects. A separate framework agreement also covers cooperation in hydropower.
Joint venture steps and financing approach
The next corporate step is the signing of a shareholders’ agreement and the formal establishment of the joint venture. After that, EPCG and Masdar would define individual project schedules and determine financing structures for each development.
Funding is expected to be organised through the joint company. It could use conventional project-finance structures or alternative financing models, depending on how each project is structured.
EPCG board president Milutin Djukanovic said the first solar development could enter construction in 2027 if remaining technical, administrative and financial work progresses according to plan.
Government-to-government energy cooperation
The partnership is part of a broader government-to-government energy relationship between Montenegro and the United Arab Emirates. The two countries initiated an energy cooperation agreement in November 2025, which Montenegro’s parliament ratified in March 2026.
EPCG and Masdar’s cooperation also extends beyond initial solar plants to include studies of pumped-storage hydropower. The companies said pumped storage could provide balancing capacity and flexibility as Montenegro adds more intermittent solar generation.
Pumped storage alongside solar generation
EPCG’s interest in pairing solar with storage is linked to its generation portfolio, which remains strongly influenced by hydrology and thermal production. Additional solar capacity could improve Montenegro’s daytime electricity balance and reduce imports, while rapid expansion without flexible capacity would increase operational challenges during high-output hours and when solar generation falls.
Pumped storage is described as a way to shift energy across the day while providing system-balancing services. The partnership also gives EPCG access to Masdar’s project-development and operating expertise while keeping equal domestic ownership of the venture, with domestic engineers and specialists expected to participate in development.
The 50:50 structure, potential use of project finance, and inclusion of both renewable generation and storage make the EPCG-Masdar arrangement broader than an equipment procurement deal. It is being structured as a platform intended to develop multiple Montenegrin electricity assets over time.
